The world is failing to look beyond computing and software to broader practical applications, according to Peter Thiel, the co-founder of eBay, who sees the technology revolution as overrated.

“I don’t think the tech revolution that’s happening to date has been enough for the western world,” Thiel told a Credit Suisse Asian Investment Conference luncheon.

“It’s not been enough for the state of California,” Thiel added, referring to the state’s strength in new technologies, particularly software.

Thiel, who was the first outside investor in Facebook, paying US$500,000 for just over 10 per cent of the social network in 2004, said “new technologies” were needed for globalisation to continue. He said developments in computing had overshadowed a lack of matching breakthroughs in other scientific areas.

“We need to develop new energy sources. We need to develop new ways to produce food more cheaply.

“We need to figure out entirely new modes for people to live because six billion people cannot be brought to the level of the one billion people in the developed world,” Thiel said, noting that the average smartphone had the same computing power as Nasa’s 1969 moon mission.

“There’s a question of whether you use computer resources to send people to the moon or do you use them to throw birds at pigs,” Thiel said. “I do think that even if the computer revolution continues, it’s probably the application of computers that matters, and the place to really look at is the intersection of computers and the real world.”

Thiel said many Nasdaq companies described themselves as technology companies “but they are really bets against technology”.

“If you invest in these stocks you are fundamentally betting that there will be no technological progress and no technological disruption,” Thiel said. “So for example, Oracle is a bet against new databases being created. Microsoft is a bet against new operating systems. Google is a bet against new search technology.”

But as recently as the 1980s, people valued Nasdaq stocks lower because they believed tech companies “were subject to enormous disruption”.

“They would change. They’d be replaced by other companies and so therefore they should have a lower price earnings ratio for a tech company because it was subject to all this disruption,” Thiel said.

“Today, the Nasdaq has a higher PE than the rest of the stock market because people think these businesses are unusually stable because they’re really pricing in this extraordinary amount of stagnation and this lack of innovation.”

Thiel also queried the huge cash holdings of technology leaders like Microsoft, Google and Apple at a time when zero interest rates meant they were effectively losing money by leaving it in the bank rather than seeking a return through investing it.

“The fact that the most cash-rich companies in the developed world are the so-called tech companies suggests that there’s something very strange going on.”